A.T.E. ENTERPRISES P. LTD ( NOW KNOWN AS ATE P. LTD), MUMBAI V. DCIT RG 2(1), MUMBAI

ITA 9064/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4239 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-07-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 27-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KALIK SINGH
• Keywords: Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI . , ! ' #'' '$ , % ! & BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 9064 / / 2010 A.Y. 2002-03 ITA NO. : 9064/MUM/2010 (ASSESSMENT YEAR: 2002-03) A.T.E. ENTERPRISES PRIVATE LIMITED (NOW KNOWN AS ATE PRIVATE LIMITED), 43, DR. V.B. GANDHI MARG, FORT, MUMBAI -400 021 .: PAN: AAACA 4481 G VS DCIT -RANGE 2 (1), AAYAKAR BHAVAN, M.K. MARG, MUMBAI -400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NITESH JOSHI RESPONDENT BY : SHRI KALIK SINGH /DATE OF HEARING : 04-07-2013 !' / DATE OF PRONOUNCEMENT : 10 -07-2013 * O R D E R #'' '$ , : PER VIVEK VARMA, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) 4, MUMBAI, DATED 30.11.2010, 2. THE SOLITARY ISSUE RAISED IS WHETHER EXPENSES OF RS. 4 ,72,852/- INCURRED FOR REPAIRS OF RENTED PROPERTY IS TO BE TREATED AS CAPITAL EXPENDITURE. 3. IN THE ASSESSMENT PROCEEDINGS, THE ISSUE WAS TAKEN UP AND THE AO HELD, FROM THE DETAILS OF EXPENDITURE FILED BY THE ASSES SEE, IT IS SEEN THAT THE ASSESSEE HAS INCURRED AN EXPENDITURE OF RS. 4,72,83 2/- ON REPAIRS TO BUILDINGS. IT IS SEEN FROM THE DETAILS FILED THAT T HE EXPENDITURE HAS BEEN A.T .E. ENTERPRISES PRIVATE LIMITED (NOW KNOWN AS ATE PRIVATE LIMITED) ITA NO. 9064/MUM/2010 2 INCURRED ON MAJOR REPAIRS & RENOVATION. THE EXPENDI TURE INCURRED IS FOUND TO BE NOT IN THE NATURE OF ROUTINE REPAIRS RE QUIRED TO BE INCURRED TO KEEP THE PREMISES IN GOOD WORKING CONDITION. ACCORD INGLY THE EXPENSES ARE TREATED AS CAPITAL IN NATURE. HOWEVER, DEPRECIA TION AT THE APPROPRIATE RATE IS BEING ALLOWED. 4. AGGRIEVED THE ASSESSEE APPROACHED THE CIT(A), WHO SU STAINED THE ORDER OF THE AO BY PLACING RELIANCE ON THE PRECEDING YEARS DECISION IN ITA NO. 703/MUM/2005. 5. AT THE TIME OF HEARING BEFORE US, THE AR SUBMITTED TH AT THE EXPENSES DISALLOWED AND HELD TO BE CAPITAL IN ITA NO. 703/M UM/2005, WERE: I ANCHOR MARINE PLYWOOD 2.44 X 1.22 X 19 MM 2.44 X 1.22 X 6 MM 2.44 X 1.22X 9 MM RS. 1,30,364 (LANDMARK AGENCY) II M.S. FLATS BAR (4X10) (50X10) RS. 1,63,195 III M.S. BRIGHT BAR RS. 32,592 IV M.S. ROUNDS RS. 35,325 V M.D.F. BOARDS RS. 17,225 VI BASEMENT FLOORING (RAJNI R. MODI) RS. 54,340 6. IN THE INSTANT YEAR, THE EXPENSES INCURRED AND CLAIME D AS REVENUE ARE TYPICALLY MINOR REPAIRS IN OFFICE PREMISES, AMC P AYMENTS AND OTHER UPKEEP OF THE PREMISES, WHICH ACCORDING TO TH E AR AND THE CERTIFICATE OF MR. GOPAL BOHRA WERE PRODUCED BEFORE THE RE VENUE AUTHORITIES, WHICH WERE IGNORED IN ENTIRETY. 7. THE AR SUBMITTED THAT SINCE THE EXPENSES WERE PURE LY NOMINAL, NORMAL AND DAY TO DAY MAINTENANCE AND UPKEEP OF THE OFFIC E PREMISES, SHOULD BE ALLOWED. 8. THE DR, RELIED ON THE ORDER OF THE REVENUE AUTHORITIES AND ALSO ON THE DECISION RENDERED BY THE COORDINATE BENCH IN ITA NO. 703/MUM/2005 IN THE CASE OF THE ASSESSEE. 9. WE HAVE PERUSED THE ORDERS OF THE REVENUE AUTHORIT IES AND ALSO THE ORDER OF THE COORDINATE BENCH, RELIED UPON BY THE CI T(A) AND THE A.T .E. ENTERPRISES PRIVATE LIMITED (NOW KNOWN AS ATE PRIVATE LIMITED) ITA NO. 9064/MUM/2010 3 DR AND THE DETAILS OF EXPENSES INCURRED AND PLACED BEFORE THE REVENUE AUTHORITIES. WE FIND THAT THE DETAILS, EXPENSES ARE DIFFERENT IN CHARACTER. AS PER THE DETAILS FURNISHED BEFORE US, WE FIND T HAT THE EXPENSES INCURRED ARE ON AMC AND NORMAL DAY TO DAY RE PAIRS AT DIFFERENT VENUES. SINCE THE CHARACTER OF THE EXPENSES INC URRED IN THE CURRENT YEAR ARE ENTIRELY DIFFERENT FROM THE EXPENSES, AS REPRODUCED IN PARA 5 ABOVE, THE DECISION OF THE COORDINATE BENCH, AS R ELIED UPON BY THE CIT(A) IN ITA NO. 703/MUM/2005, CANNOT BE RELIED UPON, AS THE FACTUAL DISTINCTION HAS BEEN DRAWN. WE ALSO FIND SUPPORT FRO M THE ORDER OF COORDINATE BENCH IN THE CASE OF CYMOZA ART GALLE RY VS ACIT, REPORTED IN 142 ITD 799 (MUM), WHERE CERTAIN EXPENSES OF THE LIKE NATURE WERE INCURRED FOR THE UPKEEP ON THE RENTED PRE MISES, AS THAT, IN THE INSTANT CASE AND IN THE INSTANT YEAR. 10. WE, THEREFORE, SET ASIDE THE ORDERS OF THE CIT(A) ON THIS ISSUE AN D DIRECT THE AO TO ALLOW RS. 4,72,832/-, AS CLAIMED BY THE ASSESSEE. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY, 2013. SD/- SD/- ( . ) ( #'' '$ ) ! ! (B. RAMAKOTAIAH) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 10 TH JULY, 2013 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT (A)-4, MUMBAI. 4) & & ' II, MUMBAI / THE CITII, MUMBAI. A.T .E. ENTERPRISES PRIVATE LIMITED (NOW KNOWN AS ATE PRIVATE LIMITED) ITA NO. 9064/MUM/2010 4 5) ()* + , , & + , -. / THE D.R. A BENCH, MUMBAI. 6) */ 0 COPY TO GUARD FILE. &12 / BY ORDER 3 / 4 5 & + , -. DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *784 . . * CHAVAN, SR. PS